Weekly News (April 22, 2020)

This week’s Interest Rate (17th Week)

(Fairway Asset Corp.)

 30 Y Rate: 3.490%/ 15 Year Rate:3.250%/ 10 Y Treasury: 0.549%/  FHA:3.490%
Prime Rate:3.0% / Ref IR: 0.00- 0.25%

Conventional rates went up a little bit and Government loans(FHA,VA, USDA) still have difficulties. Jumbo loan have difficulties


New Jersey Schools will be closed till 5/15/2020

(The Korea Times  4/17)

  • New Jersey Schools were closed as of 3/18 and it was announced that they will make a decision to extend or not by 4/17.  They decided to extend school lock down till 5/15.
  • According to school regulation, allowed time for remote on line class is included to the required legal 180 days a year.


New York is planning REOPENING with multiple steps 

( The Korea Daily  4/22)

  • On 21st, death toll was dropped to 481 from the peak level of 700 a day, which it was 478 on 20th.  ICU admission was dropped and total hospital admission has been dropped consecutive 8 days.  The death toll is 14,347 and positives are 247,543 in NY.
  • Governor announced that each area has different situation and the reopening will be planned by each area.  For example, upstate New York area was much less exposed and they can allow doctor office visit and surgery.
  • In NYC, a partial traffic restriction for about 75 miles roads is being considered.


In Manhattan, Luxury condo deals dropped 90% in the past 4 weeks 

( Jason Shim from TRD 4/20)

  • Only eight contracts were inked for properties costing more than $4 million, a 90 percent year-over-year decrease, Sylvia Varnham O’Regan reports.  The total asking price for the 84 contracts signed during the same four-week period last year was $675.5 million.  The asking price for the eight homes sold this year was $71.2 million.
  • Meanwhile, the flow of luxury deals in Brooklyn was similarly slow.  According to a new report by Compass, only two contracts were signed last week for homes whose asking price was more than $2 million.  The most expensive deal was for a condo unit at 1 Clinton Street in Brooklyn Heights, which had an asking price of $2.4 million.


All SBA’s PPP program money: $34.9B has been used up

( The  Korea Times 4/17)

  • Less than 2 weeks, $34.9B has been out to applicants and no money for this program.  SBA announced that dispensed $33.8B to 1.6M applicants till morning of 4/16.
  • Received loans can be used for pay roll, rent, utilities in order to be forgiven.
  • Independent Contractors (RE agents) are eligible to apply as a single employee with Tax report Schedule C to calculate the monthly average income.


Trump announced 3 Steps of “OPENING UP America Again” Plan on 16th 

(The Korea Daily 4/17)

  • President Trump has unveiled Guidelines for Opening Up America Again, a three phased approach base don the advice of public health experts.
  • Criteria:
  1. Downward trajectory of influenza-like illness(ILI) reported within 14 day period
  2. Downward trajectory of covid-like syndromic cases reported within a 14 day period
  3. Downward trajectory of documented cases within a 14 day period, or downward trajectory of positive tests within a 14 day period

–    Phase I:

  • Vulnerable individual should continue to shelter. Maximize physical distance
  • No more than 10 people gathering
  • Minimize non-essential travel
  • Employers to encourage Telework whenever possible and feasible business operations
  • If possible, return to work on phases.

–    Phase II:

  • Vulnerable individual should continue to shelter. Maximize physical distance
  • No more than 50 people gathering
  • Non-essential travel can resume
  • Employers to return to work while encourage Telework
  • Common areas will be closed or enforce moderate social distancing protocols

–    Phase III:

  • Vulnerable individual can resume public interactions, but should practice physical distancing
  • Employers can resume unrestricted staffing of worksites


Trump will order to stop issuing Green Cards temporarily

(The  Korea Daily  4/22)

  • The White House announced on 20th that Trump will sign the executive order to stop immigration in order to protect jobs of US citizens.  No details were known at this moment.  The Department of Justice is under review that this order can be justified.
  • The Democrats criticized on 21st that Trump is using the Pandemic situation to pursue his basic anti-immigration policy.
  • International Amnesty director Joan Lynn said that Trump’s serious prejudice and hatred of foreigners are deepened.
  • Currently 3.5M people are waiting for US permanent resident status outside US and 1M inside US: Total about 5M people are waiting for their immigration to US.


In March, residential sales dropped 8.5% in US

(The Korea Times, The Record   4/22)

  • According to NAR, US existing home sales has dropped to 5.27 M (Annual rate) in March which is 8.5% decrease from the last month annual rate, and 0.8% decrease from a year ago.  This is the biggest drop since Nov. 2015.
  • This number includes the deals already made in Jan and Feb before COVID-19 outbreak.
  • In Feb, sales was increased 6.5% which was the biggest hike for 13 years.
  • Typically the ratio between existing homes and new construction is 90:10 in US.


Oil price has dropped sharply for two consecutive days

(The  Korea Times , The Record  4/22)

  • WTI price has been dropped to $11.57 per barrel for June supply from $20, which is 43.4% decrease by $8.86 at NYMEX market.
  • July supply WTI is also dropped to $18 from $26.
  • This price drop was unexpected from the market.


The Death of Department Stores In US

( NYT  4/22)

  • American department stores, once all-powerful shopping meccas that anchored malls and Main Street across the country, have been dealt blow after blow in the past decade.
  • Even more, nothing compares to the shock the weakened industry has taken from the coronavirus pandemic.
  • The entire executive team at Lord & Taylor was let go this month.  Nordstrom has cancelled orders and put off paying its vendors.  The Nieman Marcus Group, the most glittering of the American department store chains, is expected to declare bankruptcy in the coming days.  Before this pandemic, C. Penny and Sears were upended by hedge funds. Macy’s has been closing stores and cutting corporate staff.  Barneys New York filed for bankruptcy last year.
  • According to S&P Global Market Intelligence’s report, department stores were more likely than any other consumer industry to default on their debt in the next year. It estimated the probability of at 42%.


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